Friday, June 6, 2008
Gen Y's Continuing Media Shift and What It Means to Marketers
The data I found expected yet still somehow surprising came from Forrester's report, "Building Gen Y’s Multichannel Media Profile." Is it flabbergasting to find that consumers ages 18 to 27 are spending less time with television and more time online? Of course not, but the speed and breadth at which the changes are continuing to occur are striking.
Consumer leisure activities tend to change very slowly over time, unless some important societal factor intervenes, such as during times of war. But there's been no seismic societal changes over the past four years--the Internet is no longer new, and the biggest digital changes we've seen since 2004 are the growth of broadband, a wider adoption of digital music, and increases in the capabilities of Internet-enabled cell phones. (Yes, I know we're in a time of war, but let's not not get started on how little attention this war gets or how little sacrifice it is demanding from the American public, okay?)
But with just minor changes in the online and media landscape, there's been a significant shift in the media consumption of Gen Yers in the past three years. Time spent using the Internet has risen 80% while time spent listening to the radio has fallen 26% and time watching TV is down 15%. Those are profound changes in just 36 months.
Of course, it's not difficult to understand why this is happening. The younger Gen Yers don't remember a time before the Internet existed and have grown up with email, the Web, chat rooms, e-commerce, and online games. And even for the oldest of the Gen Y generation, the Internet was a vital part of their high school and college experience.
Still, it's interesting to note that the digital media habits of this group are still evolving. They aren't simply taking consistent online habits with them as they age; they're continuing to adopt to a new lifestyle of "living online." Three years ago, they spent 60% more time watching TV than being online, and in 2007 this demographic dedicated 1.6 more hours to their Internet time than to television.
The marketing implications of this continued shift away from traditional media and toward digital media are significant, and made even more so by the fact Gen Y's income will skyrocket in the coming years. According to eMarketer, Gen Y's annual income will rise from $1.89 trillion to $3.48 trillion in the next ten years, growing to near Gen X's income ($4.2 trillion in 2017) and eclipsing Boomer's ($2.96 trillion).
What happens when a large group of consumers see swift increases in discretionary income and rapid changes in their media habits? Marketers' worlds change very, very quickly.
We already know that marketing budgets have been shifting away from print, TV, and radio towards online tactics, but it's apparent this shift is just getting started. With the ROI for display and search advertising already getting squeezed by increasing demand and cost (and consumer indifference), and with Social Media continuing to prove an advertising challenge, the ways in which marketers can invest their budgets in online media are going to continue to change and get ever more creative (and experiential).
The marketing challenge of the next few years won't primarily be one of how to allocate dollars to different online ad types (search versus display; banners versus skyscrapers; ad network A or B), but instead will be how to engage consumers and provide real value. It will become even less about campaigns and more about consistent relationship building. How a brand looks will be far less important than how it acts. What you say won't matter; who you are will.
These years will be heady times for marketers in organizations that are marketing centric and consumer focused where being transparent, agile, open to change, honest, confident, and willing to experiment and take risks is a way of life. For everyone else--companies that focus on campaigns and advertising and not consumer experiences; that believe they can be one thing but brand themselves another; that strive for control; and that lack respect for and trust in their consumer--the next five to ten years will be confusing and threatening.
Within a few years, Gen Y will be spending twice as much time online as they do with television. They'll be learning more about brands from each other than from your advertising. Will you be part of the conversation and creating the sorts of experiences that will get consumers saying positive things about your brand? Or will be more concerned about whether you get better clickthrough from a 468-x-60 or a 120-x-600 ad unit?